"Exactly What Is Note Purchasing?"

How To Purchase A Note"

Valerie P. Robinson

Perhaps you've heard the term,"Note" but unfamiliar with its exact meaning.Especially in the field of Real Estate and Finance. The term, "Note" is seen mainly in Residential and in some Sommercial real estate transactions. A "Note" is generally created with the purchase or sell of ant type of real estate or commercial property. These "Notes" are creative real estate financing.The "Note" acknowledges the debt and the promise of repayment of the funds given to finance the property. Let's examine how to recognize a"Note". The most and often financing strategy to the creation of a "Note" in real estate and finance market is through the method of "Seller-Financing". Perhaps your wondering,"How  does Seller financing create a "Note?".

Seller -Financing in Today's market consists of giving the Buyer either a First or a Second Mortgage. In the Second Mortgage, the seller can command a higher interest rate, which is to the seller's advantage.SHould the seller consdier seller-financing? That decision must be determined by the seller.However, its how many "Notes" are created. It's these types of "Notes" that have a ready appeal to many an Investor. Why? Generally these types of "Notes" are no longer wanted by the Seller and the seller prefers to have their Cash now! Now you can see how the Purchase of "Notes can be quite profitable! These types of "Notes" a Trust Deed or Mortgage Deeds and ones where the sellers receives the payments from the buyers. However the seller does not hold the Deed to the proerty unless the seller is in whats called the "First Position". Now let's examine how this works to an Investors advantage.

Mr.and Mrs. Seller sold their home for$150,000.00. Mr. Buyer deposited 2% as a down payment($3,000.00) and was able to obtain 95%LTV(Loan-To-Value) on the existing property. Mr.and Mrs. Seller agreed create a "Note" using "Seller-Financing" for thr remaining amount of $4500.00 at an Interest rate of 9.5% for 24 months with payments in the amou nt of $39.72 to be paid to Mr.and Mrs. Sellers. Let's make this more interesting.Let's say that Mr. Buyer has not made payments to Mr. and Mrs Sellers as agreed upon in their actual"Note" transaction. Now Mr.and Mrs. Seller might be interested in selling their "Note" because Mr. Buyer has defaulted on making payments to Mr.and aMrs.Seller as agreed. The viewppoint froma a Real Estate Investor is to seek out MrandMrs.Seller and offer to purchase their "Note" from them. Do you Purchase the "Note" based on the term within the Trust Deed or Mortgage? Yes!

Your Purchase of the "Note" to the terms outlined in the Trust Deed or Mortgage is advantageous to you the investor. How? By you Purchasing the "Note" on the terms outlined in the trust Deed or Mortgage enables you to pursue the financing that our Sellers' were suppose to acquire. Now,you have the been given from the "Note" purchase the identical Seller's Rights to the property. Now do you see how the purchasing of "Notes" can be quite a financial benefit to a real estate investor whom seeking to create a real estate portfolio! Or anyone wishing to enter the real estate ivesting. But with all areas of financing, you need to consider the risk. It is suggested that you research, read, and ,Mortgage study several articles pertaining to "Notes" and "Purchasing of "Notes", "Trust Deeds and Mortgages" and "Seller Financing"before tacking an actual"Note" purchase transaction.Seek out Legal assistance or information on "Notes".  

Valerie Robinson, 1st Metropolitian Mortgage Mortgage Specialist Consulting/Seminars Contact Ph:(815)936-9389 Email:robinson3389@sbcglobal.net